Investor Presentation Q3 2013 - Cascades - …M CAN$) EBITDA Q2-2013 Selling Prices & Mix Raw...

CASCADES INC.

Review of Q3 2013financial resultsfinancial results

November 7, 2013

Certain statements in this presentation, including statements regarding future results and performance, are forward-lookingstatements within the meaning of securities legislation based on current expectations. The accuracy of such statements issubject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from thoseprojected, including, but not limited to, the effect of general economic conditions, decreases in demand for theCorporation’s products, the prices and availability of raw materials, changes in the relative values of certain currencies,fluctuations in selling prices and adverse changes in general market and industry conditions. This presentation may alsoinclude price indices as well as variance and sensitivity analyses that are intended to provide the reader with a betterunderstanding of the trends related to our business activities. These items are based on the best estimates available to themanagement of the Corporation.

The financial information included in this presentation also contains certain data that are not measures of performanceunder IFRS (“non-IFRS measures”). For example, the Corporation uses earnings before interest, taxes, depreciation and

DISCLAIMER

The financial information included in this presentation also contains certain data that are not measures of performanceunder IFRS (“non-IFRS measures”). For example, the Corporation uses earnings before interest, taxes, depreciation andamortization (EBITDA) because it is the measure used by management to assess the operating and financial performanceof the Corporation’s operating segments. Such information is reconciled to the most directly comparable financialmeasures, as set forth in the “Supplemental Information on Non-IFRS Measures” section of our most recent quarterlyreport or annual report.

Specific items are defined as items such as charges for impairment of assets, for facility or machine closures, accelerateddepreciation of assets due to restructuring measures, debt restructuring charges, gains or losses on sales or acquisition ofbusiness units, unrealized gains or losses on derivative financial instruments that do not qualify for hedge accounting,foreign exchange gains or losses on long-term debt and other significant items of an unusual or non-recurring nature.

All amounts in this presentation are in Canadian dollars unless otherwise indicated.

2

OPENING REMARKSOPENING REMARKSOPENING REMARKSOPENING REMARKS

SUMMARY OF FINANCIAL RESULTS

72

8478

70 68

83

96

4.0%

5.5%

7.0%

8.5%

10.0%

0

25

50

75

100

Q12012

Q22012

Q32012

Q42012

Q12013

Q22013

Q32013

(% of sales)(M CAN$)

EBITDA

4840

44

35

4641

78

0.0%

2.5%

5.0%

7.5%

10.0%

0

20

40

60

80

Q12012

Q22012

Q32012

Q42012

Q12013

Q22013

Q32013

(% of sales)(M CAN$)

Cash flow from operations (adjusted)

Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Year

Financial results

Sales 891 944 906 904 3,645 914 982 995 2,891

Excluding specific items

EBITDA 72 84 78 70 304 68 83 96 247

Net earnings (loss) 1 5 4 (5) 5 (4) 8 7 11

Net earnings (loss) per share $0.01 $0.05 $0.05 $(0.06) $0.05 $(0.04) $0.09 $0.07 $0.12

Cash flow from operations (adjusted) 48 40 44 35 167 46 41 78 165

2012 2013

(In millions of CAN$, except amount per share)

EBITDA, net earnings and cash flow from operations (adjusted) excluding specific items. Note 1 - 2012 restated to comply with IAS19 standard – Employee benefits

4

Best results since 2010 with strong performance from Best results since 2010 with strong performance from our two our two core sectorscore sectors

1

1

27

19 21 2326 25 25

33

42

0%

4%

8%

12%

16%

0

12

24

36

48

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

(% of sales)(M CAN$)Containerboard

10 1013

117

11 11 10 9

0%

3%

6%

9%

12%

0

5

10

15

20

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

(% of sales)(M CAN$)Boxboard Europe

HISTORICAL SEGMENTED EBITDA

Containerboard Boxboard Europe

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

13

2

11

15 15

8

11

16 15

0%

3%

6%

9%

12%

0

5

10

15

20

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

(% of sales)(M CAN$)Specialty Products

18

28

3339

3531 29

3339

0%

5%

10%

15%

20%

0

11

22

33

44

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

(% of sales)(M CAN$)Tissue Papers

EBITDA excluding specific items. 5

Tissue PapersSpecialty Products

(M CAN$)EBITDA

Q2-2013

Selling

Prices &

Mix

Raw

MaterialsEnergy $ CAN

Acqu.

&

Divest.

Other

CostsVolume

EBITDA

Q3-2013

10

9

2

21

1

8

10

12

14

16

18

(7)

(M CAN$)EBITDA

Q2-2013

Other

Costs

Selling

Prices &

Mix

Volume Energy

Acqu.

&

Divest.

$ CANRaw

Materials

EBITDA

Q3-2013

33

426

53 1

(6)

20

25

30

35

40

45

50

SEGMENTED EBITDA WATERFALLS

Boxboard EuropeContainerboard

- -- -

(M CAN$)EBITDA

Q2-2013

Selling

Prices &

Mix

Other

CostsEnergy

Raw

Materials

Acqu.

&

Divest.

$ CAN VolumeEBITDA

Q3-2013

1615

2

(1)

(2)

8

10

12

14

16

18

20

6

(M CAN$)EBITDA

Q2-2013Volume

Selling

Prices &

Mix

Other

CostsEnergy

Acqu.

&

Divest.

$ CANRaw

Materials

EBITDA

Q3-2013

33

39

3

3

31

(1)

(3)

26

29

32

35

38

41

44

20


Specialty Products Tissue Papers

Q3 is the slowest quarter in Europe due to downtime

Impact of external paper purchases during Greenpac ramp-up

Higher volumes due to good performance in US retail segment

Flood had an impact on shipments

--

- - -

KEY PERFORMANCE INDICATORS (KPIs)Containerboard: 88%

Boxboard Europe: 86%Spec. Prod.: 74%

Tissue Papers: 100%

Slightly lower shipments;increased capacityin Europe

822

774

807 825805 806

832868 840

500

600

700

800

900

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

('000 s.t.) Total Shipments

87%86%

89%90%

87% 88%

92% 93%

87%

83%

86%

89%

92%

95%

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Capacity Utilization Rate (Manufacturing)

Lower shipments in Europe due to usual slowdown in Q3Lower shipments in Europe due to usual slowdown in Q3

Refer to Notes included in the Appendix. 7

2011 2011 2012 2012 2012 2012 2013 2013 2013 2011 2011 2012 2012 2012 2012 2013 2013 2013

7.4%

6.5%

7.1%

7.6% 7.5%

8.1% 8.0% 8.0%

8.5%

5%

6%

7%

8%

9%

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

LTM Return on Assets

14.7% 14.8% 14.8% 15.0% 14.8%14.4%

14.0%13.5%13.1%

8%

10%

12%

14%

16%

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

LTM Working Capital (% of LTM Sales)

Current(October)

RAW MATERIAL COSTS

120

155

970

860

Current(October)

600

700

800

900

1,000

1,100

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

Jun

13

Sep

13

(US$/ tonne)

Virgin Pulp Prices

50

100

150

200

250

300

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

Jun

13

Sep

13

(US$/ ton)

Recycled Fiber North AmericanList Prices

OBM Average Quarterly List Prices Q3-2012 Q2-2013 Q3-2013 YoY QoQ

Brown grades - OCC No. 11 (New England) 108 112 115 +6% +3%

White grades - SOP No. 37 (New England) 182 150 152 -17% +1%

Virgin Pulp Prices

NBSK (Canadian sources delivered to US East) 853 937 947 +11% +1%

NBHK (Canada/US sources delivered to US East) 763 853 873 +15% +2%

No significant short term increase expected in recovered paper prices; pulp prices stableNo significant short term increase expected in recovered paper prices; pulp prices stable

Sources: RISI, Bloomberg. 8

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

Jun

13

Sep

13

NBSK NBHK

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

Jun

13

Sep

13

White grades (SOP) Brown grades (OCC)

FINANCIAL REVIEWFINANCIAL REVIEWFINANCIAL REVIEWFINANCIAL REVIEW

Q3 2012 – Q3 2013 SALES RECONCILIATION

920

0

960

940

980

1,000 995

+10%

906

0

45

40 4 0(M CAN$)

Sales benefited from higher volumes and a weaker CAN$Sales benefited from higher volumes and a weaker CAN$

10

(M CAN$)

Sales

Q3-2012Volume $ CAN

Selling

Prices

& Mix

Acqu. &

Disposals

Corp.

Elim.

Sales

Q3-2013

Containerboard 299 41 6 5 2 353

Boxboard Europe 181 18 (5) 194

Specialty Products 197 (8) 6 2 197

Tissue Papers 253 12 10 4 279

Corporate (24) (4) (28)

Total 906 45 40 4 0 0 995

0

Q3 2012 – Q3 2013 EBITDA VARIANCE ANALYSIS

120

90

0

100

110

80

(10)

4

78

58

9615

+23%

(13)

9

(M CAN$)

Important increase Important increase YoYYoY despite external parent roll purchases and use of subdespite external parent roll purchases and use of sub--contractingcontracting

EBITDA excluding specific items.1 Raw materials include fibre as well as parent rolls used by converting operations.

11

1

(M CAN$)

EBITDA

Q3-2012Volume Energy $ CAN

Acqu. &

Disposals

Selling

Prices &

Mix

Raw

Materials

Other

Costs

EBITDA

Q3-2013

Containerboard 26 13 3 2 4 5 (13) 2 42

Boxboard Europe 7 4 1 1 (5) (1) 2 9

Specialty Products 15 (2) 0 3 1 (2) 15

Tissue Papers 35 4 2 2 4 3 (11) 39

Corporate (5) (4) (9)

Total 78 15 9 8 5 4 (10) (13) 96

Q2 2013 – Q3 2013 EBITDA VARIANCE ANALYSIS

0

110

100

90

039

12 96

83

+16%

(7)

(3)(1)

(M CAN$)

(M CAN$)

EBITDA

Q2-2013

Selling

Prices

& Mix

Other

CostsEnergy

Acqu.

&

Divest.

$ CAN VolumeRaw

Materials

EBITDA

Q3-2013

Containerboard 33 5 6 1 3 (6) 42

Boxboard Europe 10 2 1 1 (7) 2 9

Specialty Products 16 2 (1) (2) 0 15

Tissue Papers 33 3 3 1 (1) 3 (3) 39

Corporate (9) (9)

Total 83 12 9 3 0 (1) (3) (7) 96

Higher Higher prices prices and cost reductions more and cost reductions more than than offsetoffset higher higher raw raw material costs and lower volume in Europematerial costs and lower volume in Europe

EBITDA excluding specific items.1 Raw materials include fibre as well as parent rolls used by converting operations.

12

1

0

IMPACT OF OPERATIONAL INCIDENTS DURING THE QUARTER

M$

• Loss of tonnage

• Containerboard Group 1

• Specialty Products Group 1

• Direct cleaning costs – Corporate 2

ActsActs--ofof--god cost us $7M during god cost us $7M during Q3Q3, lowering EBITDA by approximately $4 million, lowering EBITDA by approximately $4 million


• EBITDA impact 4

• Capitalized costs 3

• Total costs 7

96

5037

(46)

7

20

40

60

80

100

120

(M CAN$)

(20)

Q3 2013 EBITDA TO OPERATING INCOME RECONCILIATION

0

20

EBITDAexcludingspec. items

Depr. &amort.,

excl. spec. items

Op. incomeexcludingspec. items

Unrealized gainon fin. Instr.

Impairment charges

Operatingincome

(20)

14

Container- Boxboard Specialty Tissue Corporate

(M CAN$) board Europe Products Papers Activities

Operating income (loss) 33 - (12) 29 (13) 37

Specific items:

Impairment charges - - 20 - - 20

Unrealized loss (gain) on financial instruments (7) - - - - (7)

Total specific items (7) - 20 - - 13

Operating income (loss) excluding specific items 26 - 8 29 (13) 50

Depreciation, excluding specific items 16 9 7 10 4 46

EBITDA excluding specific items 42 9 15 39 (9) 96

Total

Share of Share ofOperating Ass/JV & Excluding As Operating Ass/JV & Excluding Assegments Non-Cont. Int. specifics Specifics reported segments Non-Cont. Int. specifics Specifics reported

EBITDA 83 83 (1) 82 96 96 (13) 83Depreciation (44) (44) (44) (46) (46) (46)EBIT 39 0 39 (1) 38 50 0 50 (13) 37Financing expenses (26) (26) (26) (27) (27) 1 (26)Interest expense on employee future benefits (3) (3) (3) (3) (3) (3)FX gain (loss) on LT debt and fin. inst. 0 (5) (5) 0 11 11Share of results of associates and JVs (1) (1) (1) (5) (5) 5 0Profit before tax 10 (1) 9 (6) 3 20 (5) 15 4 19Provision for income taxes (1) 1 0 0 0 (9) 2 (7) 0 (7)

Q2-2013 Q3-2013

QUARTERLY VARIANCE OF EPS EXCLUDING SPECIFICS

Provision for income taxes (1) 1 0 0 0 (9) 2 (7) 0 (7)Non-controlling interests (1) (1) (1) (1) (1) (1)Net earnings 9 (1) 8 (6) 2 11 (4) 7 4 11 per share $0.10 ($0.01) $0.09 ($0.06) $0.03 $0.12 ($0.05) $0.07 $0.05 $0.12

Change in Operating results after-tax (normalized 30%) $0.07Change in Income taxes provision (vs normalized 30%) ($0.05) � Tax rate mix, Europe valuation allowance, prior year tax adj.Change in Share of results of Assoc. and JVs - net of taxes ($0.04) � Mainly share of Greenpac & Boralex

($0.02)

15

Tax consideration and equity pickTax consideration and equity pick--up had a negative impact on EPS excluding up had a negative impact on EPS excluding specificsspecifics

34

46 41

78

15

30

45

60

75

90

(M CAN$) Cash flow from operations,including specific items

(4)

4

48

(15)

0

15

30

45

(M CAN$) Free cash flow

CASH FLOW OVERVIEW

0

15

Q4-2012 Q1-2013 Q2-2013 Q3-2013

(27)(30)

Q4-2012 Q1-2013 Q2-2013 Q3-2013

1 Excluding increase in investments.

Important FCF increase during the quarter due to improved performanceImportant FCF increase during the quarter due to improved performance

16

(in millions of CAN$) Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Year

Cash flow from operations, including disc. operations 48 37 42 34 161 46 41 78 165

Capital expenditures & other assets, net of disposals1

(47) (36) (25) (57) (165) (46) (33) (26) (105)

Dividend & share buyback (6) (4) (4) (4) (18) (4) (4) (4) (12)

Free cash flow (5) (3) 13 (27) (22) (4) 4 48 48

Free cash flow per share $(0.05) $(0.03) $0.14 $(0.29) $(0.23) $(0.04) $0.04 $0.51 $0.51

2012 2013

NET DEBT RECONCILIATION

(M CAN$)

1,650

1,600

1,550

1,700

(78)

1,675

6

23

-4%

4131,601

(31)(11)

Net debt Net debt decrease linked to operational performance, working capital management and FXdecrease linked to operational performance, working capital management and FX

Q3 2013 net debt includes $128 million of non-recourse net debt of Reno De Medici and other unrestricted subsidiaries.17

1,500

1,400

1,450

Net Debt06/30/2013

Net Debt09/30/2013

Other items

Capex, net of disp.

Investment Greenpac

Variationof

CAN$

Dividends and

buybacks

Var. of working

cap.

Cash flow from op.

5.9x

3.3x

4.5x

5.8x

5.0x 5.0x

3.0x

4.0x

5.0x

6.0x

7.0x

2008 2009 2010 2011 2012 LTM 09/30/2013

Net debt / LTM EBITDA

3.0x

4.6x

2.9x2.5x

3.0x 3.1x

1.0x

2.0x

3.0x

4.0x

5.0x

2008 2009 2010 2011 2012 LTM 09/30/2013

Interest Coverage Ratio

CONSOLIDATED FINANCIAL RATIOS & DEBT MATURITIES

59%

54%

57%

59%

61%61%

45%

50%

55%

60%

65%

2008 2009 2010 2011 2012 Sep-13

Debt / Debt + Equity

09/30/2013 09/30/2013

Before 20167%

201644%

201733%

202016%

Long-term Debt Maturities Distribution

18

Leverage ratio almost at 2012 levelLeverage ratio almost at 2012 level

Cascades’ bank debt financial covenant ratios: Net funded debt to capitalization < 65% (currently at 55%),interest coverage ratio > 2.25x (currently at 3.0x).

SEGMENTED REVIEWSEGMENTED REVIEWSEGMENTED REVIEWSEGMENTED REVIEW

� Increased shipments mostly related to higher sales on the US retail market

� Volume of converted products increased by 5% while parent rolls shipments decrease by 3% due to a more favorable integration rate

� Sequential increase of average selling prices explained by a favorable integration rateresulting in a product mix that included more converted products

� Positive impact of favorable exchange rate

� Stable prices for parent rolls and converted products

Results

Q3 2013 Q2 2013 Q3 2012

Shipments ('000 s.t.)

153

Average selling price

(CAN$/unit)

1 822(US$/unit)

Change vs.

3% 4%

3% 6%

TISSUE PAPERS

Comments on sequential performance

EBITDA exckuding specific items

� Stable prices for parent rolls and converted products

� Higher shipments and favorable exchange rate explain sequential increase in sales

20

� Positive impact of improved productivity, higher sales volume, favorable exchangerate and higher integration rate more than offset higher raw material costs, namelyvirgin pulp and recovered papers

� A reduction of promotional activities, including an important initiative which was heldin Q2, has contributed to reduce operational costs

1 755

Sales (M$)

279

EBITDA (M$)

39% of sales

14%

1%

6% 10%

18% 11%

1%

� 2% sequential increase in external shipments in our manufacturing activities despiteflooding incident in Niagara Falls for 5,800 tons (3% containerboard and -8% boxboard)

� 3% increase in shipments of converted products (+5% for Canadian corrugatedproducts activities while the industry remained stable; offset by a 18% decrease infolding carton including the impact of the Lachute plant closure in Q2 2013)

� Second price increased in corrugated products segment fully implemented and to bereflected in the results of the next quarter

� Our containerboard manufacturing activities fully benefited during the quarter of the Mayprice increase while our boxboard manufacturing activities benefited from the May and

Results

Q3 2013 Q2 2013 Q3 2012


334


(CAN$/unit)

1 057(US$/unit)

1 018

Change vs.

3% 12%

2% 5%

1% 1%

PACKAGING / CONTAINERBOARD


price increase while our boxboard manufacturing activities benefited from the May andAugust price increases

� Weakening of the Canadian dollar positively impacted selling prices in our twosegments

� Sequentially, higher average selling prices (+$5M) combined higher volume as citedabove (+$3M) and its positive impact on production costs (+$5M, including a $3Mimpact from a favorable product mix) have more than offset additional costs related tothe purchase of external containerboard rolls (-$2M) and higher cost of recycled fibre (-$2M)

21

� Significant increase in sales due to higher shipments (+$9M), higher prices for most ofour segments (+$5M) and a favorable exchange rate (+$2M)

1 018

Sales (M$)

353

EBITDA (M$)

42% of sales

12%

18%

1% 1%

27% 62%

5%

EBITDA excluding specific itemsAverage selling prices now include converted products

� Sequential decline in shipments related to usual seasonal downtime in European board market

� Order book is still healthy and better than at the same period last year for recycled boxboard

� Market share increased since last year, particularly in Italy

� Average prices increased by 1%, including a 3% from recycled boxboard

� Announced price increases for recycled grades in Q2 are still being implemented butshould gradually be effective in Q4

Results

Q3 2013 Q2 2013 Q3 2012


260


(CAN$/unit)

745(Euros/unit)

541

Change vs.

-14% 0%

4% 7%

1% -3%

PACKAGING / BOXBOARD EUROPE


should gradually be effective in Q4

� Sequential weakening of the Canadian dollar against the Euro

� EBITDA negatively impacted by lower shipments (-$7M) partially offset by higher selling prices (+$2M) and favorable exchange rate (+$1M)

22

� Seasonal decline in shipments (-$28M) partially counterbalanced by favorable exchange rate (+$5M).

541

Sales (M$)

194

EBITDA (M$)

9% of sales

5%

1% -3%

-10% 29%

-10% 7%

EBITDA excluding specific items

� Selling prices in the Specialty Papers and Industrial Packaging segments have remained stable compared to the previous quarter

� Unfavorable product mix due to lost volume from St-Jérôme negatively impacted average selling price in US dollar

� Sequential decrease in shipments in the Specialty Papers segment due to a flooding incident that caused a production downtime of 3 weeks at our St-Jérôme Fine Paper Mill (loss of 4,000 tons)

� The incident also affected the operations of our Breakeyville Pulp Mill and our St-JéromeConverting Center

� Partially offset by higher volume in the Industrial Packaging segment

Results

Q3 2013 Q2 2013 Q3 2012


93


(CAN$/unit)

894(US$/unit)

Change vs.

-1% -6%

0% 0%

PACKAGING / SPECIALTY PRODUCTS


selling price in US dollar

� More than offset by weakening of Canadian dollar

� Slight improvement in sales linked to higher volume in the Recovery and Industrial Packaging segments that counterbalanced lower volume in the Consumer Product Packaging and Specialty Papers segments as explained above

� A favorable exchange rate also contributed positively to the increase in sales

23

� EBITDA decreased compared to the previous quarter due to lower volume caused by downtime in the Specialty Papers segment as mentioned above

� Negative FX impact due to stronger Canadian dollar at the end of Q3 compared to the end of Q2

861

Sales (M$)

197

EBITDA (M$)

15% of sales

8%

1% 0%

-2% -4%

-6% 0%

EBITDA excluding specific items1 Shipments and average selling prices for Specialty Papers and

Industrial Packaging segments only

Q&AQ&A

ANDANDANDAND

CONCLUDING REMARKSCONCLUDING REMARKS

NEAR TERM OUTLOOK

++

II

• State of Canadian economy

• Stable to slightly increasing raw material costs

• New capacity in tissue industry

• Challenges in our North American boxboard operations

• Price increases in boxboard sector in North America and Europe

• Benefits of restructuring and optimization measures

• Improvement of Greenpac contribution to EPS

• Incremental capacity in our Tissue Papers Group

25

Boxboard

EuropeContainerboard Specialty Products Tissue Papers

Volume Increase Slight increase Slight decrease Slight decrease

Selling prices Slight increase Slight increase Stable Slight decrease

Raw material costs Stable Slight increase Slight increase Stable

CDN $ vs

other currencySlight increase Sligh increase

Energy costs Stable Stable

APPENDIXAPPENDIXAPPENDIXAPPENDIX

ENERGY PRICES

Hedging Program – Natural gas

• Canada:

• 2014 : 65% at 5.35 CAN$/GJ

• 2015: 56% at 4.83 CAN$/GJ

• U.S.:

• 2014: 57% at 5.16 US$/mmBtu

• 2015: 39% at 5.29 US$/mmBtu5060708090100110

0.001.002.003.004.005.006.007.00

Crude oil(US$)

Natural gas(US$)

Energy prices

• 2015: 39% at 5.29 US$/mmBtu

27

Source: Bloomberg

500.00

Q4-

10

Q1-

11

Q2-

11

Q3-

11

Q4-

11

Q1-

12

Q2-

12

Q3-

12

Q4-

12

Q1-

13

Q2-

13

Q3-

13

Natural gas (US$/mmBtu) Crude oil (US$/barrel)

2012

Averages Year Year Q1 Q2 Q3

Energy prices

Natural gas Henry Hub (US$/mmBtu) 4.04 2.79 3.34 4.09 3.58 28% -13%

Crude oil WTI (US$/barrel) 94.01 94.92 93.37 92.54 102.42 14% 11%0%

Change2011

Q3 2013

Q3 2012

Q3 2013

Q2 2013

2013

FOREIGN EXCHANGE

Hedging Program – USD Cash flows

• 2014

22 to 36% of exposure hedged at an average rate of 1.041CAN$/US$ to 1.056CAN$/US$

• 2015

1 to 3% of exposure hedged at an 0.650.700.750.800.850.900.95

0.800.850.900.951.001.051.10

-10

-11

-11

-11

-11

-12

-12

-12

-12

-13

-13

-13

€/CAN$US$/CAN$ Exchange rates

1 to 3% of exposure hedged at an average rate of 1.06CAN$/US$

28

Source: Bloomberg

2012

Averages Year Year Q1 Q2 Q3

Foreign exchange rates

US$/CAN$ 1.011 1.001 0.991 0.977 0.963 -4% -1%

EURO/CAN$ 0.727 0.779 0.751 0.748 0.727 -10% -3%

Change2011

Q3 2013

Q3 2012

Q3 2013

Q2 2013

2013

Q4-

Q1-

Q2-

Q3-

Q4-

Q1-

Q2-

Q3-

Q4-

Q1-

Q2-

Q3-

US$/CAN$ €/CAN$

400

500

600

700

800

900

1 000

1 100

-10

-10

-10

Jan

-11

Mar

-11

May

-11

Jul-1

1

Sep

-11

Nov

-11

Jan

-12

-12

-12

-12

-12

-12

Jan

-13

-13

-13

-13

-13

Containerboard - Selected Products

20-pt clay coated news (CRB)

Linerboard 42-lb

Corrugating medium 26-lb

(US$/s.t.)

SELECTED INDUSTRY REFERENCE PRICES

500

600

700

800

900

1 000

1 100

1 200

-10

-10

-10

-11

-11

-11

-11

-11

-11

-12

-12

-12

-12

-12

-12

-13

-13

-13

-13

-13

Boxboard Europe - Selected Products

Coated duplex - virgin board (GC2)

White-lined chipboard - recycled board (GD2)

(€/m.t.)

QoQ: +30$tc(+3%)

Jul-

Sep

-

Nov

-

Jan

-

Mar

-

May

-

Jul

Sep

-

Nov

-

Jan

-

Mar

-

May

-

Jul-

Sep

-

Nov

-

Jan

-

Mar

-

May

-

Jul-

Sep

-

800

900

1 000

1 100

1 200

1 300

1 400

1 500

1 600

Jul-1

0

Sep

-10

Nov

-10

Jan

-11

Mar

-11

May

-11

Jul-1

1

Sep

-11

Nov

-11

Jan

-12

Mar

-12

May

-12

Jul-1

2

Sep

-12

Nov

-12

Jan

-13

Mar

-13

May

-13

Jul-1

3

Sep

-13

Tissue Papers - Selected Products

Virgin parent rolls

Recycled parent rolls

(US$/s.t.)

500

600

700

800

900

1 000

1 100

1 200

Jul-1

0

Sep

-10

Nov

-10

Jan

-11

Mar

-11

May

-11

Jul-1

1

Sep

-11

Nov

-11

Jan

-12

Mar

-12

May

-12

Jul-1

2

Sep

-12

Nov

-12

Jan

-13

Mar

-13

May

-13

Jul-1

3

Sep

-13

Specialty Products - Selected Products

Grocery bag 30-lb

Uncoated white, 50-lb of fset, rolls

20-pt bending chip food

(US$/s.t.)

29

Jul-

Sep

-

Nov

-

Jan

-

Mar

-

May

-

Jul-

Sep

-

Nov

-

Jan

-

Mar

-

May

-

Jul-

Sep

-

Nov

-

Jan

-

Mar

-

May

-

Jul-

Sep

-

QoQ:-64$/tc(-5%)

QoQ: -30$/tc(-3%)

QoQ: 17$/tc(+3%)

MARKET PRICES AND COSTS SUMMARY

2011 2012 2013

Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3

(units) (%) (units) (%)

Selling prices (average)

Cascades North American US$ index (index 2005 = 1,000)1 1,256 1,271 1,227 1,233 1,261 1,248 1,263 1,298 1,319 86 7% 20 2%

PACKAGING PRODUCTS

Boxboard

North America (US$/ton)

Recycled boxboard - 20pt. clay coated news (transaction) 909 920 913 887 880 900 880 912 942 55 6% 30 3%

Europe (Euro/tonne)

Recycled white-lined chipboard (GD2) index2 710 698 677 677 669 680 656 656 670 -6 -1% 15 2%

Virgin coated duplex boxboard (GC2) index3 1,153 1,141 1,118 1,118 1,106 1,121 1,086 1,086 1,086 -32 -3% 0 0%

Containerboard (US$/ton)

Linerboard 42-lb. unbleached kraft, East U.S. (transaction) 640 640 640 657 690 657 690 740 740 83 13% 0 0%

Corrugating medium 26-lb. semichemical, East U.S. (transaction) 610 610 610 627 660 627 660 710 710 83 13% 0 0%

Q3 2013

over Q2 2013

Q3 2013

over Q3 2012These indexes should only be used as indicator of trends and they be different

than our actual selling prices or purchasing costs.

30

Corrugating medium 26-lb. semichemical, East U.S. (transaction) 610 610 610 627 660 627 660 710 710 83 13% 0 0%

Specialty Products (US$/ton, tonne for deinked pulp)

Recycled boxboard - 20pt. bending chip (transaction) 670 670 670 657 650 662 653 665 682 25 4% 17 3%

Deinked pulp (f.o.b; U.S. air-dried & wet-lap, post-consumer) 763 663 675 713 715 692 740 755 758 45 6% 3 0%

Unbleached kraft paper, grocery bag 30-lb. 1,095 1,110 1,110 1,110 1,110 1 110 1,118 1 135 1 135 25 2% 0 0%

Uncoated white 50-lb. offset, rolls 940 923 920 920 907 918 898 870 840 -80 -9% -30 -3%

TISSUE PAPERS

Cascades Tissue Papers (index 1999 = 1,000)4 1,669 1,654 1,647 1,651 1,642 1,649 1,619 1,598 1,594 -57 -3% -4 0%

Raw materials (average)

Cascades North American US$ index (index 2005 = 300)5 472 386 382 367 340 369 353 348 358 -9 -2% 10 3%

RECYCLED PAPER

North America (US$/ton)

Corrugated containers, no. 11 (New England) 149 123 120 93 82 104 94 98 102 10 10% 4 4%

Special news, no. 8 (ONP - Chicago & NY average) 126 85 90 70 60 76 67 65 58 -13 -18% -8 -12%

Sorted office papers, no. 37 (SOP - Chicago & NY average) 233 145 151 170 151 154 150 138 135 -36 -21% -3 -2%

Europe (Euro/tonne)

Recovered paper index6 140 113 118 102 111 111 111 119 115 13 13% -4 -3%

VIRGIN PULP (US$/tonne)

Northern bleached softwood kraft, East U.S. 978 873 900 853 863 873 898 937 947 93 11% 10 1%

Northern bleached hardwood kraft mixed, East U.S. 808 714 778 763 744 750 791 853 873 111 15% 20 2%

WOODCHIPS – Conifer Eastern Canada (US$/odmt) 127 130 121 120 120 123 110 107 105 -15 -13% -2 -2%

Source: RISI, Random Lengths and Cascades.

NORTH AMERICAN MANUFACTURING SPREAD

1,2341,267

1,2721,261

1,319

452

514450

550

650

750

850

1,200

1,300

1,400

Manufacturing spread in CAN$ in Manufacturing spread in CAN$ in Q3/13: +3% Q3/13: +3% vsvs Q2/13 Q2/13 and and +16% +16% vsvs Q3/12Q3/12

Refer to Notes page included in the Appendix.Source: RISI

31

452

409340

358

150

250

350

1,000

1,100

Q4 2010

Q1 2011

Q22011

Q3 2011

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Selling prices index ($US/s.t.)1 Raw materials index ($US/s.t.)2

NOTES

1. The Cascades North American selling prices index represents an approximation of the Corporation's manufacturing selling prices in NorthAmerica (excluding converting). It is weighted according to shipments and is based on the average selling price of our North Americanmanufacturing operations of boxboard, containerboard, speciality products and tissue paper. It considers the change in the mix of products sold.This index should only be used as a trend indicator.

2. The Cascades recycled white-lined chipboard selling prices index represents an approximation of Cascades’ recycled grades selling prices inEurope. It is weighted by country.

3. The Cascades virgin coated duplex boxboard selling prices index represents an approximation of Cascades’ virgin grades selling prices inEurope. It is weighted by country.

4. The Cascades Tissue Papers selling prices index represents a mix of primary and converted products, and is based on the product mix at theend of 2006.

5. The Cascades North American raw materials index is based on publication prices and the average weighted cost paid for some of ourmanufacturing raw materials, namely recycled fibre, virgin pulp and woodchips, in North America. It is weighted according to purchase volume.This index should only be used as a trend indicator, as it may differ from our actual manufacturing purchasing costs and our purchase mix.

6. The Cascades recovered paper index represents an approximation of Cascades’ recovered paper purchase prices in Europe. It is weighted bycountry based on the recycled fibre supply mix of 2009 and has been updated in 2013.

The capacity utilization rate is defined as: Shipments/Practical capacity. Paper manufacturing only.

Return on assets is a non-IFRS measure and is defined as: LTM EBITDA excluding specific items/ LTM Average of total quarterly assets. It includes

discontinued operations.

Working capital includes accounts receivable plus inventories less accounts payable.

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